Microsoft to Open Music Store

Store will compete with iTunes

November 18, 2003 12:00 AM ET

Microsoft Corp. will unveil its own online music store next year, setting up a battle of the giants with its longtime rival Apple's iTunes store.

Short on details, Lisa Gurry, MSN Group Product Manager, said in a statement, "We are excited to confirm that MSN will deliver a download music service next year, and we look forward to sharing more details at a later date."

With iTunes already a success on both Macs and with a recently launched Windows version, Microsoft will have some catching up to do. The software giant will also be up against Musicmatch, MusicNow and Roxio, which all use Microsoft's Windows Media as well as its digital rights management technology. Other competitors include BuyMusic, the recently revived Napster and a soon-to-be-launched Rhapsody store. Additionally, Amazon, Best Buy and Wal-Mart have announced plans to open their own music download services.

The advantage Microsoft has is the nearly universal reach of its Windows software as well as its deep pockets, which could allow it to undercut the competition. Apple's Steve Jobs has admitted that the ninety-nine cents iTunes is charging for songs, as well as low prices for album downloads, has made it a loss leader, despite selling more than 17 million songs since its April debut.

Microsoft's announcement comes eight months after the iTunes launch, at which time Microsoft said it had no plans to compete directly with Apple.

A Microsoft spokesman said he could not reveal any details about the service other than to confirm that it will launch in 2004. The company has reportedly been speaking to all the major labels and has signed deals with a handful already. A job posting on the Microsoft Web site seeks a product manager to finalize the store's business plan and work on budget, branding and positioning.

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